The Tanzania Revenue Authority (TRA) has announced that it will install a system to monitor earnings from all telecommunications products and services including airtime on local calls. These are currently not captured in Tanzania’s Telecommunication Traffic Monitoring System (TTMS).
Telecommunications is one of the fastest growing sectors in Tanzania but its contribution to the economy is still low. In 2015 the sector grew by 12.2% but it only contributed 3.6% of the country’s Gross Domestic Product (GDP). The increase in growth is attributed to an increase in the amount of airtime used by mobile phone customers and the expansion of broadcasting and Internet services in the country.
Technology has assisted the TRA to improve revenue collection from the mobile phone service operators after it installed a system that monitors data and money transfers. The new monitoring system will complete another piece in the revenue collection puzzle. Having efficient and transparent systems in place will ensure that there is mutual trust on both sides—government and telecommunications operators—and that way, higher amounts of revenue will be realised from the estimated 39 million mobile phone subscribers in Tanzania.
The TRA cited the example of one operator who had been paying an average of Sh250 million per month in excise duty, who paid Sh1.48 billion in July alone. The new system enabled government officials to compare reports generated by the system and those submitted by the respective companies. Another operator that has been paying an average of Sh360 million per month parted with Sh1.9 billion in the same month. Telecommunications is one of the areas that face complaints because the operators make billions but pay small amounts of tax. In fact they even boast about it. This means that more than Sh3 billion was collected from only two telecommunications firms in the country in July alone.
The improvement in revenue collection may have been influenced by the Finance Act of 2016, which increased taxes like the excise duty on mobile money services, but monitoring is also extremely important so that government does not have to rely on the accuracy of reports in a self-declaratory system.
The importance of technology to the revenue authorities in emerging countries cannot be over-emphasised. Until technology is fully understood, it is not always favoured but once the revenue-assurance solution becomes clear, governments can hardly dismiss it lightly. These systems have the ability to aggregate huge quantities of data and protect the revenue due to government.
Much has been written about the power and potential of Big Data and predictive analytics. Global challenges and developments are putting more pressure on key business sectors that are sensitive to economic cycles. As a result, the insights gathered from Big Data can help solve some of the biggest global business challenges. and many of these are also applicable to the sphere of government and policy-making.
Emerging economies need to harness the power of Big Data as this can give governments a bird’s eye view and accurate information allowing evidence-based policies to be implemented.
Evidence-based policy making is gaining importance in several African countries. If African governments want to use evidence-based policy making, they need data. Technology that has the ability to extract data in real-time from high volume transaction sectors provides a much easier and more efficient solution than manpower intensive and costly studies traditionally performed by academic institutions of NGOs.
When it comes to evidence-based policy making in this era of “Big Data” there really cannot be any excuse for government agencies to lack the appropriate tools for better regulation and evidence-based policy-making—sorely lacking in most governments. There are advisory companies working in the sphere of governance and monitoring that could assist these governments.
By installing sophisticated and efficient systems to monitor its telecommunications sector, Tanzania has catapulted itself into the forefront of modern telecommunications by installing sophisticated and efficient systems to monitor its telecommunications sector. Its bold move will surely pay off in the future.
Tanzania’s Telecommunication Traffic Monitoring System (TTMS) has proved its worth. It has also helped to capture revenue from telecommunication calls outside Tanzania where subscribers made calls to telephone subscribers within Tanzania. In essence it acts as a compliance monitoring tool. Once the telecoms companies know that there is a monitoring system in place, they provide correct data which has helped government revenue-collection a lot.
With the amendment of the Finance Act of 2016, the compliance level on money transfers has shot up and revenue from the telecoms companies has increased tenfold. Tanzania is now focusing on capturing revenue on all products in the telecommunications industry at activation point—through the new proposed telecommunications revenue assurance system. The system will be able to categorise revenue from voice, SMS (short messages) and data.
The Acting Chairperson of the Infrastructure Development Parliamentary Committee Mr Selemani Moshi Kakoso, commended the government for implementing the committee’s directives that have seen this increase in government revenue from the telecommunication companies. He stressed that the collaboration between the Tanzania Communications Regulatory Authority (TCRA) and the Tanzania Revenue Authority (TRA) should be enhanced and a team formed to ensure more revenue avenues are identified. Furthermore, the TCRA should cooperate with telecommunication companies to reduce money theft where unscrupulous people hack into other people’s accounts and use them to extort money from people.
Enhanced coordination between the TRA and the TCRA can only augur well for the future.